Which housing markets are better than renting
As rent across the nation continues to rise rapidly, more and more people are finding that it’s cheaper to buy than rent, even with soaring home prices. According to Realtor.com, the national average rent is almost $1,800 per month, which is an increase of over 20% from January 2020. Among cities hit the hardest with rent spikes are Miami, FL, which is up 52% over a year to an average monthly rental price of $2,895. This makes Miami the fifth most expensive place to live in the nation.
Furthermore, this report determined that the monthly cost of buying a first-time home was cheaper than renting a similar home in over half of the country’s 50 largest cities. So, while many people are searching for affordable housing, they may be torn because the cost of renting and buying are both increasing, but several factors could tip the scale in favor of homeownership this year.
One such factor is that rent costs are predicted to outpace the growth of for-sale asking prices in 2022, which is already evident in rentals of all sizes. Worse yet, one survey found that many landlords plan to increase rates even higher this year.
Which Housing Markets are Better than Renting?
Examining the data behind national median rent and home prices shows that the cost of monthly rentals is still more affordable than buying a home. However, in 26 of America’s biggest cities, buying a home is over 20% or $323 cheaper on average than renting.
So what cities make it more advantageous to buy? At the top of our list is Pittsburgh, Pennsylvania, where the price of owning a starter home is nearly 33% less than renting. Next on the list is Birmingham, Alabama, where the average homeowner saves over $375 or 30% over renting.
The following cities on the list include St. Louis, Cleveland, Baltimore, and Louisville. However, one city that really stands out on our list is Virginia Beach, Virginia. What makes it different? Well, historically, coastal areas are among the most expensive places to rent and buy – just take cities like Miami, New York, and Los Angeles, for example.
Virginia Beach is located at the mouth of the Chesapeake Bay on the Atlantic Ocean, giving it plenty of charm and diversity. The area is known for its immense arts and entertainment district, which is home to many family-friendly and other types of attractions. At the same time, the area features a flourishing dining scene, unique districts offering their own benefits, and let’s not forget about its rich maritime history. The city is home to a 3-mile boardwalk and Oceanfront, which are the center of action in Virginia Beach. And did we mention the average home price is just over $300,000?
Ultimately, choosing to rent or buy is a personal decision. It should take into consideration the person’s financial situation, location, and how long they plan to live in the home. In general, if you plan to live in the house for less than three years, it’s better to rent in many cases. So, if you’re looking to buy a new home, it’s probably best to do it sooner rather than later because, between rising mortgage rates and supply issues, the prices aren’t expected to start trending downward anytime soon.
Scott is a Business Development Manager at 1stNWM. He blogs about home loans, personal finance and lives in Orange County, CA. He feels good about sharing his expertise and real world stories of successful real estate transactions. when he’s not at work, he is with his bestie, a four-legged furry and often sloberring Saint Bernard, Wyatt.